This year's South Tyneside Festival attracted more than 120,000 visitors - about 13,000 more than last year's event.
The latest figures from South Tyneside Council have shown the packed summer programme of 40 different attractions could have been worth £3.6m to the borough's economy.
And a review of the scheme has suggested it could have been South Tyneside poorest families who benefited the most from a schedule which was open to all without having to pay a penny.
"A lot of people have said they wouldn't be able to take their kids anywhere if it wasn't for the free events at the seafront," said Coun Ernest Gibson, a former mayor.
"Other councils charge for these types of events, but I think South Tyneside is the only place in England which provides this, otherwise people who are less fortunate wouldn't be able to do anything."
Coun Gibson was speaking at a meeting of the council's Place Select Committee, which he also chairs, on Tuesday, December 3.
Figures have suggested that about a third of visitors to festival events had household incomes of less than £25,000, while a further 15% earned less than £15,000.
Richard Jago, the council's culture and libraries manager, said this showed it offered entertainment for those who "might otherwise not be able to take their families out for the day" over the summer.
More than half of visitors are thought to have been from the borough, with the rest from the wider North East and beyond, with others thought to be from as far away as the Isle of Man, Aberdeen and Plymouth.
